5 High Profile VC’s Thoughts About Cryptocurrency Investment

Is it the right time? Should I go all in or set a percentage ratio? I’m I aware of my risk-profile? Should I go into ICO’s too?

Cryptocurrency investments should be classified has extremely risky, to help you clarify your thoughts let’s listen to what 5 known cryptocurrency enthusiasts have to say.

CHAMATH PALIHAPITIYA

Most well-known from his time at Facebook, Chamath Palihapitiya has repeatedly recommended (e.g., here and here) that everyone should put about 1% of their investment capital into bitcoin. The crux of his argument is that bitcoin is uncorrelated with traditional assets classes (e.g., stocks), and will, therefore, serve as a hedge against the “autocratic regimes and banking infrastructure that we know is corrosive”.

TOM LEE

Tom Lee is the co-founder of Fundstrat and is endlessly bullish about bitcoin. In this presentation at the Upfront Summit, Tom Lee highlights that top cryptocurrencies have an “uncorrelated alpha” which is the “holy grail of portfolio allocation”. Translated, this means that cryptocurrencies are not correlated with other asset classes (e.g., stocks)

At this point in the presentation (on this slide), Tom notes that putting just 2% of your investment portfolio into bitcoin between 2014 – 2017 would have increased your returns by 2% (from 6% to 8%). Interestingly, a 10% allocation split between bitcoin and the top 10 cryptocurrencies would have yielded a 19% return (with a higher Sharpe ratio) over the same period.

Not a fan of this piece, but it offers some contrast to Chamath Palihapitiya, Tom Lee, and Michael Novogratz.

LOUIS THOMAS

Louis Thomas is a millennial cryptocurrency YouTuber who invested his life savings into Bitcoin and Ethereum in 2017. Quite a bold move. He notes that it wasn’t a huge amount (given he’d just finished university at the time). He also comments that he’d still go all in even if he was investing into cryptocurrency for the first time in 2018. This decision turned out well for him, but he doesn’t meaningfully weigh in on whether other millennials (who presumably have a low net worth) should follow his example.